Vice Media files for bankruptcy after wave of layoffs

Online media company, once valued at $5.7bn, seeks bankruptcy protection after it scrambled to find buyer.

Vice Media offices display the Vice logo at dusk on February 1, 2019 in Venice, California. Vice Media announced it is cutting 250 jobs globally
Vice Media has announced it is filing for bankruptcy protection [Mario Tama/Getty Images/AFP]

Vice Media has filed for bankruptcy protection, the latest digital media company to falter after a meteoric rise.

Vice said on Monday that it has agreed to sell its assets to a consortium of lenders – Fortress Investment Group, Soros Fund Management and Monroe Capital – in exchange for $225m in credit. Other parties will also be able to submit bids.

The Chapter 11 bankruptcy filing was announced weeks after the company announced it would cancel its flagship Vice News Tonight programme and lay off employees. The layoffs were expected to impact more than 100 employees in the 1,500-person workforce, The Wall Street Journal reported. The company also said it would end its Vice World News brand, making Vice News its only brand worldwide.

Bankruptcies filed under Chapter 11 of the United States Bankruptcy Code are meant to protect an indebted company from its creditors to facilitate its sale or reorganisation into a profitable enterprise.

Monday’s filing comes during a wave of media layoffs and closures – including job cuts at the Gannett newspaper-publishing chain, National Public Radio and The Washington Post. In April, BuzzFeed Inc announced that its Pulitzer Prize-winning digital media outlet BuzzFeed News was being shut down as part of a cost-cutting drive by its corporate parent.

The current uncertain economic situation and plummeting digital advertising sales have also cut into the profitability of major tech companies from Google to Facebook.

Vice Media’s roots date back to 1994 with the launch of Vice’s original punk magazine in Montreal. Vice soon moved to New York and built itself into a global media company.

Over the years, Vice developed a reputation for in-your-face journalism that covered daring stories around the world. The media company’s assets also include film and TV production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.

The media company has struggled to turn around profits in recent years. As it faced a financial crunch, Vice secured $30m in debt financing from Fortress Investment Group in February, The Wall Street Journal reported.

In 2017, Vice was valued at $5.7bn. Most experts estimate the company is now worth just a fraction of that, The New York Times reported this month.

Co-CEOs Bruce Dixon and Hozefa Lokhandwala said the sale process will strengthen the company and position it for long-term growth, “thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms”.

Source: News Agencies